This growth results from the increasing reliance on PoS for both payments and cash withdrawals, driven by persistent cash shortages and the rapid expansion of fintech-powered PoS networks.

In terms of transaction volume, there was an 8% year-on-year increase, with 1.5 billion PoS transactions recorded in 2024 compared to 1.4 billion the previous year. The expansion of PoS terminals also surged, as deployments more than doubled to 5.5 million from 2.4 million in 2023—a 129% jump. 

Meanwhile, the number of registered PoS terminals rose from 3.5 million in December 2023 to 7.8 million by the end of 2024. However, over 2 million registered devices are yet to be deployed, revealing untapped prospects for further expansion.

The Rise of PoS: Fintechs Driving Financial Inclusion

Historically, commercial banks outshined PoS terminal deployment, but fintech companies have taken the lead in recent years. The demand for alternative payment solutions skyrocketed due to cash shortages at ATMs and long bank queues, making PoS transactions a convenient choice for millions of Nigerians.

Financial analyst Adewale Adeoye explained the shift, stating, “The rapid growth of PoS is not just an avenue for payment but also withdrawals have filled a gap for many Nigerians who struggle to access cash through banking channels such as ATM or teller withdrawals. It has also helped in bringing banking services closer to the rural areas, which do not have as many banks accessible to them.”

Fintech Firms Expanding PoS Networks

Leading fintech companies continue to push PoS adoption across the country. PalmPay, for example, has onboarded over 700,000 agents and is expanding its reach to all 774 local government areas in Nigeria. “This mission has fueled our efforts in deploying more PoS terminals across the country,” said Femi Hanson, head of Marketing and Communications at PalmPay.

Similarly, Moniepoint disclosed that it has deployed over 800,000 PoS terminals nationwide and is working on introducing an advanced PoS machine that integrates payment processing, inventory management, and transaction reconciliation. OPay, another major player in the sector, reported having over 500,000 PoS agents across the country.

Beyond convenience, the growth of PoS transactions has economic implications. Increased transactions contribute to government revenue through the Electronic Money Transfer Levy (EMTL), which applies to transactions of N10,000 and above. PoS businesses have also become a source of income for many Nigerians, particularly in rural areas where banking services remain limited.

However, there are still issues about rising PoS charges. With limited cash availability at bank ATMs, many Nigerians have no choice but to rely on PoS agents, who have increased transaction fees. In some parts of Lagos, withdrawing N5,000 now attracts a fee of N500—far higher than the N100 or N200 charged a few months ago.

PoS operators justify the higher charges, pointing to the increasing difficulty in sourcing cash, often purchasing it from alternative sources like petrol stations due to bank limitations.

Electronic Payments Reach Historic High

In a related development, electronic transactions in Nigeria surged to N1.07 quadrillion in 2024, surpassing the quadrillion mark for the first time. This represents a 79.6% increase from the N600 trillion recorded in 2023, according to NIBSS data. 

The NIBSS Instant Payment (NIP) system, which facilitates real-time interbank transfers, remains the dominant electronic payment method, processing transactions across mobile apps, USSD, internet banking, PoS terminals, and ATMs.

This is a 107% increase from the N15 billion collected in November of the same year, reiterating the impact of the levy following its expansion to fintech platforms.

The levy, which has been in place since 2020, applies to all electronic transfers above N10,000, excluding transfers between personal accounts within the same bank. While initially applied to transactions within banks, the charge was extended to fintech platforms like OPay, PalmPay, and Moniepoint starting December 1, 2024. As a result, customers who previously enjoyed fee-free transfers are now charged N50 on eligible transactions.

With the decision to include fintech platforms in the EMTL collection, the government aims to increase non-oil revenue, and the December 2024 figures show that the initiative is paying off. 

Despite the levy’s extension, fintech companies like OPay have clarified that they do not benefit from the charge, as it is entirely directed to the Federal Government.

For the same period, a total of N1.424 trillion was distributed among Nigeria’s three tiers of government—Federal, State, and Local Governments—based on various revenue sources. 

This figure includes N386.1 billion from statutory revenue, N604.9 billion from Value Added Tax (VAT), N402.7 billion from exchange differences, and the aforementioned N31.2 billion from EMTL. While statutory revenue saw a decrease of over N600 billion from the previous month, VAT revenue increased by N20.6 billion.

The allocation from the EMTL revenue was shared among the levels of government with the Federal Government receiving N4.7 billion, States receiving N15.6 billion, and Local Governments receiving N10.9 billion. Again, 13% of the mineral revenue, totalling N113.5 billion, was shared among the states involved in oil production.

The breakdown of the overall distributable revenue for December 2024 shows that the Federal Government received N451.2 billion, while States and Local Governments were allocated N498.5 billion and N361.8 billion, respectively. 

However, the overall collection for the month also had deductions for various costs, including collection expenses and refunds.

The government is focusing on diversifying its revenue streams, particularly through digital channels though there have been issues about the impact on consumers, particularly those accustomed to free transactions. The government seeks fiscal sustainability and increased revenue from non-oil sectors.